May 15, 2018 / 9:10 PM / 6 months ago

LIVESTOCK-Live cattle slumps for 2nd straight day on falling cash prices

    By Karl Plume
    CHICAGO, May 15 (Reuters) - Chicago Mercantile Exchange live
cattle futures         fell sharply for a second straight
session on Tuesday, pressured by technical selling and weakening
cash cattle prices, traders said.
    Large numbers of slaughter-ready cattle are expected to
continue flooding the market over near term and futures prices
have slumped in anticipation of a cash price decline.
    The most-active August contract        settled 1.500 cents
lower at 100.400 cents per pound, its lowest since April 4. June
cattle        ended down 1.650 cents at 102.975 cents.
    So far this week, a small number of cattle at U.S. Plains
feedlot markets have traded from $112 to $118 per cwt, down
sharply from last week's sales of mostly $122 per cwt, traders
said. Prices are likely to remain weak when the bulk of cattle
on offer are sold later this week, they said.
    "This wall of cattle is coming to a head. We've got a
monster number of cattle on feed," said analyst Craig VanDyke of
Top Third Ag Marketing.
    "We've seen cash cattle top out in the first week of May in
the past three years and as of right now that looks to be
holding true," he added.
    Large cattle purchases by packers over the past two weeks
gave some traders the impression that buyers would be less
aggressive this week, even as packer margins remain robust.
    The average beef packer margin on Tuesday was estimated at
$162.95 per head, up from $135.45 a week ago, according to
livestock marketing advisory service HedgersEdge.com.        
    CME feeder cattle futures followed live cattle lower, with
actively-traded August        ending 1.925 cents lower at
138.450 cents per pound.
    Lean hog futures         dropped on technical selling and
fund liquidation, and as the futures market shed some of its
premium to cash hog prices.
    CME June hogs        fell 1.425 cents to 74.725 cents per
pound, with selling accelerating as the contract fell below key
chart points including its 20- and 50-day moving averages. July
hogs        ended down 1.025 cents at 77.700 cents.

 (Reporting by Karl Plume
Editing by Marguerita Choy)
  
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